Legal developments affecting professional liability insurers

Tag Archives: Texas

By Bonnie Thompson on October 29, 2018 Posted in Breach of ContractA Texas federal district court, applying Texas law, has held that a contract exclusion in an errors and omissions policy precluded coverage for a suit alleging that the insured breached a contract and committed related misconduct in connection with a contract for providing health management services to a client. Conifer Health Solutions, LLC v. QBE… Continue Reading

By Karen L. Toto on October 24, 2018 Posted in LossApplying Texas law, the United States Court of Appeals for the Fifth Circuit has held that an insured law firm’s dispute with its clients about the scope of the firm’s contingency fee award did not involve covered Loss. John M. O’Quinn, P.C. v. Lexington Ins. Co., 2018 WL 5075485 (5th Cir. Oct. 18, 2018).… Continue Reading

By Nicole Audet Richardson on October 10, 2018 Posted in Related Claims and associated exclusionsApplying Texas law, a federal district court has held that an insurer breached its policy by denying coverage for two lawsuits filed after the policy period on the basis that they were not related to an earlier lawsuit. Nobilis Health Corp. v. Great American Ins. Co., 2018 WL 4810840 (S.D. Tex. Oct. 4, 2018). The… Continue Reading

By Jessica N. Gallinaro on August 30, 2018 Posted in Related Claims and associated exclusionsIn a win for Wiley Rein’s client, a Texas state court, applying Texas law, has held that no coverage was available for Wells notices issued and an enforcement action brought by the United States Securities and Exchange Commission (SEC) because they were related to the SEC’s original investigation, which commenced prior to the claims-made policy… Continue Reading

By Margaret Thomas on July 16, 2018 Posted in UncategorizedIn a case that was briefed and argued by Wiley Rein in the trial court and on appeal, along with Fox Rothschild LLP as Delaware local counsel, the Delaware Supreme Court held that Texas law applies to a comprehensive insurance program issued to a Texas corporation and its subsidiaries nationwide. The Travelers Indemnity Company v.… Continue Reading

By Hume Ross on June 19, 2018 Posted in Defense CostsThe United States District Court for the Northern District of Texas, applying Texas law, has held that the directors and officers of a corporation in receivership were entitled to advancement of defense costs despite the receiver’s objections. SEC v. Faulkner, 2018 WL 2761850 (N.D. Tex. June 6, 2018). The court declined, however, to reallocate the… Continue Reading

By Emily S. Hart on April 23, 2018 Posted in RescissionThe United States District Court for the Southern District of Texas has held that an exclusion contained in the application incorporated into the policy barring coverage for claims “based upon, arising out of or in connection with” misstatements in the application did not apply because the misstatements at issue, regarding a change in the insured’s… Continue Reading

By Bonnie Thompson on April 9, 2018 Posted in UncategorizedApplying Texas law, the United States Court of Appeals for the Fifth Circuit has held that the fortuity doctrine precludes coverage for a suit filed against an attorney before his lawyers professional liability coverage incepted because the loss occurred or was ongoing at the time the policy was issued. Wesco Ins. Co. v. Layton, 2018… Continue Reading

By Danielle Barondess on January 30, 2018 Posted in “Claim”,Wrongful ActApplying Texas law, a federal district court has held that a broadly-worded securities exclusion bars coverage of claims “incidental” to alleged misrepresentations made in connection with the sale of securities. Gleason v. Markel Am. Ins. Co., 2018 WL 538324 (E.D. Tex. Jan. 24, 2018). The court further held that an exception for claims involving transactions… Continue Reading

By on October 12, 2017 Posted in Notice of Claim,Related Claims and associated exclusionsA federal district court, applying Texas law, has held that an insured is not entitled to coverage for subsequent related claims when the insured gave late notice of the first claim. ADI Worldlink, LLC v. RSUI Indem. Co., 2017 WL 4112112 (E.D. Tex. Sept. 18, 2017).… Continue Reading

By Jessica N. Gallinaro on September 8, 2017 Posted in Public Policy prohibition on insuranceApplying Texas law, the United States Court of Appeals for the Seventh Circuit has held that public policy prohibits enforcement of a settlement arrangement in which an insurer with no duty to defend played no role in the settlement, the plaintiff promised to seek damages only from the insurer, and the insured defendant admits liability,… Continue Reading

By on May 4, 2017 Posted in Loss,Personal Profit/Advantage exclusionThe United States District Court for the Southern District of Texas, applying Texas law, and adopting the recommendation of a magistrate judge, has held that reimbursement of excessive executive compensation constitutes disgorgement and is therefore uninsurable as a matter of law under a directors and officers policy. Twin City Fire Ins. Co. v. Oceaneering Int’l,… Continue Reading

By Bonnie Thompson on March 6, 2017 Posted in Insured v. Insured ExclusionThe Texas Supreme Court has held that the insured-versus-insured exclusion in a D&O policy precludes coverage for a claim asserted by the insured’s fidelity insurer, under an assignment of rights from the insured, against a former director of the insured. The court reversed the holding of the intermediate court of appeals and reinstated the trial… Continue Reading

By on December 21, 2016 Posted in Bad faith/duty to settle,Prior Knowledge/Warranty Exclusion,Wrongful ActThe United States Court of Appeals for the Fifth Circuit, applying Texas law, has held that the prior knowledge exclusion contained in a lawyers professional liability policy was unduly broad as written and would be construed to apply to wrongful acts reasonably likely to lead to a malpractice claim. OneBeacon Ins. Co. v. T. Wade… Continue Reading

By Edward R. Brown on October 24, 2016 Posted in Cyber Policies and IssuesApplying Texas law, the United States Court of Appeals for the Fifth Circuit has held that a business email compromise loss involving social engineering did not “result[] directly from the use of any computer to fraudulently cause a transfer” and thus did not trigger Computer Fraud coverage under a commercial crime insurance policy. Apache Corp.… Continue Reading

By Emily S. Hart on September 2, 2016 Posted in Notice of Potential Claim (Timeliness)The United States District Court for the Southern District of Texas has held that notice of a potential claim provided to an insurance agent is not considered notice to an insurer for the purposes of determining when a claim is first reported. Evanston Ins. Co. v. Cheetah, Inc., 2016 WL 4494440 (S.D. Tex. Aug. 26,… Continue Reading

By Emily S. Hart on May 31, 2016 Posted in “Claim”,Related Claims and associated exclusionsThe United States District Court for the Southern District of Texas, applying Texas law, has held that an insurance broker is not entitled to coverage under its E&O policy because its former corporate parent already indemnified it for the settlement at issue. Southwest Risk LP v. Ironshore Specialty Ins. Co., 2016 WL 2898040 (S.D. Tex.… Continue Reading

By Emily S. Hart on February 10, 2016 Posted in Other: “Unsolicited Communications” ExclusionThe Unites States District Court for the Southern District of Texas, applying Texas law, has held that an exclusion barring coverage for certain communications, including violations of the Telephone Consumer Protection Act and “any other statute . . . prohibit[ing] or limit[ing] the . . . communication or distribution of information or other material” does… Continue Reading

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